Bahrain poised to top FDI charts in Middle East
TDT | Manama
The Daily Tribune – www.newsofbahrain.com
Reported by Mahir Haneef
Backed by strong growth in the financial services and information and communication technology (ICT) sectors, Bahrain yesterday announced that the island kingdom secured foreign direct investments (FDI) worth over 1.7 billion US dollars in 2023 and topped several global indices on attracting and retaining businesses.
This means the kingdom is poised to top the FDI charts in the Middle East when the FDI net inflows are considered as a percentage of GDP. This influx of FDI will create over 5,700 jobs in the next three years in various fields, including financial services, logistics technology, manufacturing, and tourism, the Bahrain Economic Development Board (EDB) revealed yesterday.
While highlighting the record level of FDI investment, EDB attributed the success to the support provided by Team Bahrain, an initiative of His Royal Highness Prince Salman bin Hamad Al Khalifa, the Crown Prince and Prime Minister.
Team Bahrain works behind the scenes to ensure that government sectors work closely together with the private sector to help investors and entrepreneurs looking to base their activities in the Kingdom.
FDI by sectors
The five sectors that contributed the most to FDI growth were financial services, ICT, manufacturing, logistics, and tourism, EDB officials said. “A big percentage of the FDI went to the financial services sector this year, which is something that we’ve seen year on year, obviously because of the strength of the financial services sector here in Bahrain.
ICT had a good share as well of the 1.73 billion US dollars,” revealed Mohammed Al Alawi, Chief of Marketing & Communications at EDB, during a media roundtable yesterday. The financial sector’s contribution to real GDP overtook oil, which was the largest contributor, and was 18.1 per cent in the third quarter of 2023, EDB disclosed.
Such a strong position in the financial sector secured Bahrain the first position globally in Islamic Finance Regulations (ICD-LSEG Islamic Finance Development Report 2023), EDB further said. This was due to the financial services sector continuing to achieve key milestones and high rankings on the strength of pioneering legislation in the field, officials stated.
By attracting leading local and international companies to set up or expand their operations in Bahrain, the kingdom earned its position within the top 20 best FDI performers globally on the Greenfield FDI Performance Index 2023 prepared by FDI Intelligence, EDB said.
Greenfield FDI refers to a type of FDI in which a company creates a subsidiary in a different country, building its operations from the ground up. Bahrain’s capital, Manama, earned the first spot globally in Financial Attractiveness (Global 150 Cities Index 2023, AIRINC), the EDB revealed. This was based on the kingdom’s business-friendly ecosystem, highly skilled talent pool, and best-value operating and living costs, officials said.
10th globally
Bahrain’s rankings on other global indices included securing the position of 10th globally in Policies of Doing Business (Global Innovation Index 2023, WIPO), 1st in the Arab world in Economic Freedom (Economic Freedom of the World 2023, Fraser Institute), and 1st in the Middle East and North Africa (MENA) in Financial, Investment, and Trade Freedom (Index of Economic Freedom 2023, The Heritage Foundation).
With its strategic location and solid reputation as an efficient export hub, Bahrain’s unparalleled access to the Gulf market and beyond earned it the ranking of 2nd in the Arab world (10th globally) on the Timeliness subindex (Logistics Performance Index 2023, The World Bank), a testament to its advanced logistics infrastructure.
Bahrain’s international competitiveness and success in maintaining its ease of doing business, advanced regulatory frameworks, and favourable investment environment were evidenced through these global rankings, EDB said.
Investment destination
Commenting on the impressive performance, Nada Al Saeed, Chief of Strategy at Bahrain EDB, said, “Securing top scores across global indices is a testament to Bahrain’s financial and investment freedom, business-friendly ecosystem, and highly skilled talent, which continue to support local and international business growth and expansion.
Alongside these rankings and recognition, the record-breaking level of investments attracted in 2023 underscores our island nation’s position as a leading destination for investment and talent in the region and beyond.”
Robust ecosystem
Dr. Faisal Hammad, Assistant Undersecretary for Competitiveness and Economic Indicators at the Ministry of Finance and National Economy, remarked that it is the robust ecosystem in Bahrain that has yielded positive results.
He said, “Bahrain’s commitment to streamlining regulations and continually enhancing business policies and processes is evidenced in its thriving investment environment, which works towards ensuring that every aspect of the business cycle is seamless for local and global companies alike, starting from the ease of setting up to creating a thriving ecosystem to supporting sustainable growth or expansion.”
During the media roundtable, officials said a total of nine companies were issued Golden Licences last year, and the investments amounted to 2.4 billion US dollars. These investments are expected to create over 1,000 jobs in the next three years, they revealed.
Golden licences are granted to companies that create more than 500 local jobs or invest over 50 million US dollars. In addition to privileges and benefits such as prioritised and streamlined access to land, utilities, and services, companies that obtain the Golden Licence are even extended the potential review of existing laws or regulations where necessary and applicable.
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